Money vs. Time: Family Income, Maternal Labor Supply, and Child Development

Join Giuseppe Sorrenti from the University of Zurich for this week's Economics Seminar

  • Tue 16 Oct 18

    16:00 - 17:30

  • Colchester Campus

    Economics Common Room 5B.307

  • Event speaker

    Giuseppe Sorrenti

  • Event type

    Lectures, talks and seminars
    Economics seminars

  • Event organiser

    Economics, Department of

In this seminar, Giuseppe Sorrenti will be discussing his paper on the effect of family income and maternal hours worked on child development



We exploit the longitudinal variation in the Earned Income Tax Credit benefits and in shocks on the local labor market demand as instruments to overcome the endogeneity of income and hours worked.

Our instrumental variable analysis suggests different results for cognitive and behavioral development. An additional $1,000 in family income improves cognitive development by 4.4 percent of a standard deviation but has no effect on behavioral development. 

A yearly increase of 100 work hours negatively affects both outcomes by approximately 6 percent of a standard deviation. Results are robust to different implementations.
The quality of parental investment matters and the substitution effect (less parental time) dominates the income effect (higher earnings) when the after-tax hourly wage is below $13,50. Results call for consideration of child care and minimum wage policies that foster both maternal employment and child development. 


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